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Microeconomics Midterm 2
Terms in this set (11)
What is a Supply Schedule?
Table showing how much of a product firms will sell at alternative prices
What is a supply Curve?
a graph illustrating how much of a product a firm wil sell at different prices
What is the Law of Supply?
The positive relationship between price and quantity of a good supplied an increase in market price will lead to an increase in quantity supplied and a decrease will lead to a decrease in quantity supplied.
What other factors affect the supply for a product?
Cost of Producing the product: when cost drops input rises. Price of related products: if price of soybeans increases farmers may switch to growing soybeans and grow less as a response.
What causes the supply curve to shift? How about quantity demanded?
Quantity supplied: Price Change
Curve Shift: Factors other than Price
What is the relationship between firm supply curves and the market supply curve?
Market is the sum of the firms
What are the equilibrium price and quantity?
It is the intersecting point on the graph
What is excess demand? What does excess demand imply about the price?
Demand exceeds supply: price to low
What is the excess supply? What does excess supply imply about the price?
Supply exceeds demand: price too high
Why is the equilibrium price and quantity equilibrium? Why do prices change to eliminate excess demand or excess supply? How do these changes bring quantity demanded and quantity supplied into balance?
Clears the market
How do the equlibrium price and quantity change when changes in other variables shift either the demand or supply curve?
Sets with similar terms
Microeconomics Ch 3
Chapter 5 Economics
Economics: Supply and Demand